A strong economy and significant revenue growth, combined with better spending restraint, resulted in cutting the deficit in half in 2006 - three years ahead of the goal set forth by the President in 2004. Building on this success, the President has now set a new goal to achieve a balanced budget by 2012. A strong economy has been essential to our deficit reduction achievements, and to reach a balanced budget, steady economic growth is important. But it is also important to couple growth with spending discipline.

In the Budget, each program was closely reviewed to determine if it is among the Nation's top priorities and if the program is effective and producing the intended results. Failure to meet these criteria resulted in the proposed termination or reduction of 141 programs for a savings of $12.0 billion, a step that will help channel resources to more effective programs. We have also increased resources for program integrity efforts to reduce waste, fraud, and abuse - including improper payments to ineligible recipients.

In paragraph 1, as regards the deficit reduction achievements, a strong economy is considered essential. In other words, it is seen as